A look at the AHCA Proposal...

Obamacare is on the Ropes

There have been proposed changes to the Affordable Care Act (ACA) by something called the American Health Care Act (AHCA). I want to pick a part both of these and analyze some of the pieces that ultimately affect our community. I think the easiest way to do this is in two parts. In this first one, I will discuss the provisions of the ACA that are perceived to have the most benefit to patients with chronic and/or rare diseases.

The major provisions that I believe most patients are aware of are the elimination of lifetime coverage caps and the guaranteed coverage provisions. Colin covered some of these in a previous post on Surviving the Health Care Hunger Games. But what do those mean from a practical perspective? How does that actually work for insurance companies?

Preexisting coverage exclusions were a favorite way for insurance companies to delay or deny expensive treatments to those who had a gap in coverage for whatever reason. They basically meant that the insurance companies could deny you coverage for pretty much any reason. They could review your medical records and determine that you were uninsurable. This review was obviously not something anyone with a serious, chronic illness could pass. They could also determine that you had a 12 month waiting period for a condition or treatments they determined were necessary before the initiation of your coverage. Can you imagine having to wait a year between immunoglobulin treatments? 

Lifetime coverage limits were another way insurance companies limited their liability with sick patients. Basically, you could pay your premium every year forever to ensure coverage and the insurance could decide that your cancer treatments were too expensive, so they would (and legally could) drop your insurance coverage. More than one immune deficient friend, myself included, received scary letters about lifetime caps. I actually changed jobs once because of such a letter.

Then the ACA was passed and the insurance industry changed dramatically. There were protections put in place that eliminated lifetime caps and preexisting condition exclusions. BUT – And this is the kicker – the law required healthy people to enroll in the marketplaces to buy insurance. What did that do? That actually helped spread the risk from high cost patients over more people. That’s why the individual mandate is/was such an important piece of the puzzle. Everyone will need health care at some point, so the idea is that everyone should pay in regardless of how healthy or sick they are right now. This was meant to prevent people from just enrolling when they got sick. The law works together as an organism. The consumer protections don’t function as well without consumer responsibility.

The ACA also limits total out of pocket costs. This is an obvious one that benefits expensive patients. Even though the statutory limits are pretty high, they exist. Not only do they exist, but they also include pharmacy benefits. Some plans had been shifting Ig replacement therapy to the pharmacy benefit to give the patient more of a burden in cost sharing with no cap. Those out of pocket maximums now apply to both medical and pharmacy benefits. This is huge for patients who have cancer and other expensive illnesses that can be billed under pharmacy.

Additionally, the ACA added some incentives for physicians and hospitals receiving Medicare payments to focus on quality and patient experience. These quality programs have allowed physicians and hospitals to have higher reimbursement for chronic care management and have allowed for innovative approaches to care coordination. It’s become quite a topic of discussion in health care policy circles because sustained approaches to care management have been shown to lower cost to the system while simultaneously improving patient outcomes, especially for the most complex patients. This is not something I’ve seen discussed at length in PI circles, but it’s something we should pay attention to in the future. The growth of programs like patient-centered medical homes will allow our physicians to take better care of us and have more time to spend with us overall.

Another group of ACA provisions that isn’t much discussed in the PI community, but that helps us out immensely, are the transparency provisions. Why do those matter? Well, it’s nice that insurance companies must tell you what your cost share is of a treatment before you have it. That helps with budgeting and planning. Additionally, the 80/20 rule with premiums helps patients because it limits the amount of profit the insurance companies can make and increases the amount they are required to spend on patient care.

Now, lets shift gears to part two, the American Health Care Act. The AHCA is an attempt to preserve the consumer protections while removing the most objectionable areas of the law – like the individual mandate. This mandate, as I’ve mentioned earlier, helps keep the markets more stable. There is some debate on this point, but it seems reasonable to me that if only sick people are in the insurance market, insurance will cost more. That’s one reason people are seeing premiums increase under the ACA/Obamacare. It isn’t pretty or fun to talk about, but sick people cost more to the system and increase costs to everyone. I have yet to see anything that explains how it is feasible to keep those provisions we like – elimination of caps and exclusions – without the mandates.

The AHCA also looks at repealing Medicaid expansion in time, which disproportionately affects the poor and sick. Many people on disability are dual eligible – having both Medicare and Medicaid – and would stand to lose those benefits, especially if there are work requirements attached to Medicaid, which amendments to the AHCA explicitly allow. The AHCA also allows for states to opt for block grants of Medicaid money. It’s unlikely this money would remain earmarked for Medicaid patients and is likely to result in a reduction of the availability of Medicaid care. There are some protections written in for the elderly and disabled, but without additional information from organizations like the Congressional Budget Office, it’s difficult to speculate on the outcome of the proposed amendments.

Additional proposed revisions to the AHCA bill would offer supplemental tax credits to those aged 50-64, expected to be among the hardest hit by the changes to the ACA’s tax credit structure. The “pay for” for this provision would be to allow consumers to write off less medical debt. This is problematic for those of us who may have been hit with catastrophic bills we can’t pay.  

This is not to say there aren’t positive aspects of the law. The ACA drew down something called disproportionate share (DSH) payments from Medicare. Those payments helped hospitals who saw more Medicaid eligible patients with the burden of unreimbursed care. The idea behind the elimination of DSH payments was that the amount of unreimbursed care would steadily decline as people got enrolled in Medicaid and private insurance. In some states, that has been the case, but in others which chose not to expand Medicaid, these hospitals for the most needy have been put in a precarious position. To be clear, rural hospitals do not support the AHCA, but there are some benefits to reinstating those DSH payments. This helps protect access to inpatient hospital care in underserved communities. 

The fate of the transparency and price limit features of the ACA are unclear, so it’s important that, as we watch these issues unfold, that we are vocal with members of Congress in both chambers to let them know what issues matter to us and why. Remember – if you’re not at the table, you’re on the menu. 

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